Rishi Sunak preparing his budget for ‘interesting times’

 

As expected, ‘that’ virus will probably affect the trade negotiations. The second round was supposed to have taken place in London next week, but as of this morning we don’t know if they’ll go ahead as planned.

Casting my mind back I seem to remember that after the first round – these were at the beginning of this month – mention had been made of using Skype. Michael Gove told the HoC Select Committee that ‘the two sides were discussing the practicalities’ (link) amidst rumblings that the talks could be postponed.

Should Brussels try and force this issue by insisting that only face-to-face talks will do, accompanied by calls from politicians like Mr Lammy MP on Tuesday and a NI MP yesterday (link) that Johnson should ‘swallow his pride’ and demand an extension, then we can already discern how Remain is poised to exploit this issue.

Unfortunately, the EU has already shown that video conferencing is acceptable. On Tuesday they held an emergency meeting of the EU Council – that’s the EU member state leaders – by video-conferencing. Here’s their report, with a video link even, so this Remain dream should be firmly crushed.

Then there was the Budget yesterday, presented by the new Chancellor of the Exchequer, Rishi Sunak. You’ll probably have seen the video, and you’ll have seen the headlines. Of course, the usual suspects are getting their moans in first, with criticism that he ‘failed to lead the way on green issues’ (link, paywalled) as if that were the most pressing issue rather than getting to grips with the economic fall-out of the coronavirus pandemic here in the UK.

Then there’s the still sitting Labour’s Shadow Chancellor John McDonnell, who sniffily writes in RemainCentral that this ‘Tory Budget’ simply ‘rebuilds what the Tories destroyed’ (link, paywalled). Yes, it’s all about Labour and the best chancellor (in his mind) they never had – and thank God for that!

Party politics aside, some journalists ‘got’ what this budget aimed to address. Yesterday, Ambrose Evans-Pritchard commented in his article in the DT that this budget has ‘shamed the EU and the World into emergency coronavirus action’ (paywalled link), pointing out that

“Europe is struggling to mount any coherent response. While the US Federal Reserve has cut rates by a half point, the European Central Bank seems paralysed.The EU’s legalistic spending machinery will limit any fiscal punch and slow the roll out of crisis measures. There are still no eurobonds, no shared budget, and no mutualised pan-eurozone deposit insurance for banks, which leaves vulnerable Italy in the worst of all worlds: deprived of sovereign economic instruments yet without EU fiscal support to compensate. […] There is no longer any way for Europe or the world to avoid a full-blown economic shock. But at least Britain is putting in place some shock absorbers.” (paywalled link)

Indeed so, and when one reads the reports about the lockdown not just in Italy, where the Italian government is now demanding that all shops except supermarkets and pharmacies be closed (here, paywalled here) but now also in Denmark (here), then the economic repercussions for the EU will certainly be shocking. Allister Heath in the DT also makes some pertinent observations on that budget in times of the coronavirus pandemic:

“He [Rishi Sunak ]is certainly right about the gravity of the situation. Everything has changed in the past few weeks. The public still doesn’t quite grasp the likely human, social and economic impact of the coronavirus pandemic. GDP will slump in the second and probably third quarters of this year, possibly severely; unlike the financial crisis, however, growth will hopefully bounce back quickly. Sunak didn’t explicitly use the “r-word” but he clearly understands the scale of the economic pain to come.” (paywalled link)

Let me just gently remind Mr Heath in a soft aside that our wonderful MSM have omitted to inform us properly, preferring to stoke Panic. So how would we be able to grasp this impact? Allister Heath then continues:

“He [Rishi Sunak] rightly identified a “supply-side” shock, in particular the possibility that a fifth of the workforce might be unable to work at any one time; consumers and companies will also spend much less, hurting demand. But the scale, scope and ambition of the Government’s response to this burgeoning economic crisis was remarkable: there was none of the complacency, none of the desperate delusion we saw after Northern Rock or even Lehman Brothers went down.” (paywalled link)

That praise reads like a mild swipe at former Chancellors and indeed the Treasury. Next though, importantly, the budget is put into the Brexit context:

“Sunak’s nimbleness bodes well for the Brexit negotiations. The economy is likely to recover during the summer, just in time for the next hurdle: the ending of the Brexit transition period. It is now clear that the EU, an illiberal technocratic empire, doesn’t believe in free trade with the UK unless it can also rule us. This is unacceptable, and means that whatever trade deal is struck, if any, is tragically likely to involve a lot more tariffs and other barriers. We can predict that Sunak will stand ready, and that his final fiscal statement this year will be an “Australia-style” Brexit Budget, with billions spent on helping cushion the blow for affected businesses.” (paywalled link)

That is something we have to keep in mind. I’ll only add here that, on the evidence of this budget, Mr Sunak seems to have reined in his Remain Treasury Mandarins. Let’s hope he can keep it up! 

The importance of this budget is underlined by reports on what Johnson is going to do next, in today’s COBRA meeting (here, here, paywalled here). Speculations as to what will be decided are rife, but these are the main points:

“Boris Johnson will announce today that Britain is moving into the “delay” phase of fighting the virus as he chairs a Cobra emergency meeting to sign off “social-distancing” measures telling people how to stay away from others. Advice to stay at home if you have a cough and fever even if you have not travelled, ways of “cocooning” elderly people, and suggestions about standing farther apart will all be considered. Ministers are pledging “whatever it takes” to fight the virus. […] Emergency legislation will be published next week and Matt Hancock, the health secretary, will hold talks with Labour today on a bill to hand ministers powers to order restrictions on people’s movements.” (link, paywalled)

So we’ll have to wait and see, and hope, as the government apparently does, that we Brits will stay calm and carry on. Well, us elderly certainly will. It also seems that President Trump trusts the Johnson government and indeed us to do so, given today’s headlines that he’s put a travel ban on travellers from ‘mainland Europe’ for the next 30 days – all, that is, except us and Ireland (here, here, paywalled here and here).

The next days will be crucial in regard to the progression of this pandemic here in our country. I hope that the Panic fuelled by the MSM will abate. Keep in mind though that worldwide numbers are still rising – here is an excellent list of countries affected, updated daily, but be aware that these numbers are based on governments’ information which are not necessarily , ahem, ‘precise’.

In summary – thanks to the budget we look to be well prepared for the coming economic disruption. The government will hopefully be able to walk the tightrope between strong measures and keeping our civil liberties intact for as long as possible.

One criticism I have regarding the budget: VAT on e-publications will be scrapped – yay and double-yay! – but sadly it’ll only come into effect on the 1st of December. I demand this to be brought forward because those of us who ‘self-isolate’ (or should that be ‘cocoon’?) need reading matter, especially e-books: implement that scrapping of VAT now, Rishi!

KBO!

 

Photo by HM Treasury

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